US-based venture capital firm General Catalyst has announced its merger with Delhi NCR-based early-stage investment firm Venture Highway to enhance its presence in India. This strategic move aims to strengthen General Catalyst’s foothold in the burgeoning Indian startup ecosystem.
Merger Details
The financial terms of the merger have not been disclosed. Founded in 2015 by former WhatsApp executive Neeraj Arora, Venture Highway has a notable portfolio including companies such as Meesho, MPL, Moglix, ShareChat, and SigTuple. Post-merger, the Venture Highway brand will be dissolved, and the combined entity will be named General Catalyst India. According to the Economic Times, the newly formed entity plans to invest between $500 million to $1 billion in early and growth-stage startups in India.
Strategic Vision
In a blog post, General Catalyst expressed enthusiasm about the merger, stating, “We are excited to announce that Venture Highway (VH) is merging with General Catalyst (GC) to lead GC’s initiatives in India and to seek to create one of the most powerful venture platforms to support the next generation of entrepreneurs in India.” The merger unites one of the world’s largest venture platforms with a highly reputed Indian seed investment team, emphasizing a perfect alignment in culture, people, and vision.
Leadership and Portfolio
Priya Mohan, managing director of Venture Highway, noted that the transaction does not involve purchasing the fund’s existing portfolio companies. Alongside Neeraj Arora, Mohan will spearhead General Catalyst’s efforts in India. General Catalyst, which manages over $25 billion in assets, has already backed more than a dozen Indian startups, including CRED, Spinny, and Orange Health.
Industry Context
This merger is not the first instance of a global venture fund acquiring an Indian VC to expand its presence in the Indian startup ecosystem. In 2013, US-based Accel Partners joined forces with Bengaluru-based seed-stage VC Erasmic Venture Fund to launch Accel India.
The merger occurs amid a shifting landscape in the Indian venture capital market. While some global venture funds have scaled back their investments or exited the Indian market, others see significant potential. For example, Sequoia India recently spun off from its US parent to rebrand as Peak XV Partners, and Omidyar Network, backed by eBay founder Pierre Omidyar, plans to exit the Indian market by the end of 2024. According to Tiger Global partner Scott Shleifer, the primary reason for the shift is the “lack of big returns from India.”
Future Prospects
Despite some global investors pulling back, others are ramping up their investments in India. Saudi Aramco’s venture capital arm is building a team in India and plans to invest in early-stage startups. Additionally, Apax Partners is looking to accelerate its investments in the Indian market, focusing on sectors such as pharmaceuticals, consumer goods, and tech services.